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Travel Money Guide: UK

Rates and fees last updated on 21 November 2017

If you're travelling to the UK, you'll want to know how to carry and spend your money overseas.

The United Kingdom — England, Scotland, Wales and Northern Ireland — is one of the most popular destinations in Europe for Australian travellers, and Australians get an automatic visa for six months upon entry. This article will address the ways you can bring money to the UK and spend it without incurring hefty international transaction fees. There are three options: travel cards, credit cards and debit cards.

Card schemes such as Mastercard give you a money back guarantee if you’re a victim of card fraud

Expect to be charged a commission when cashing your cheques

Fees for purchasing and cashing traveller's cheques may apply

Currency exchange rate varies over time

Cash

Greater payment flexibility

Convenience

More difficult to manage expenses

Higher risk of theft

This table is a general summary of the travel money products in the market. Features and benefits can vary between cards.

Travel money cards to take to the UK and travel money cards that should be avoided

All travel money card providers allow their customers to load and spend in Pound Sterling. The ability to hold multiple foreign currencies on a travel card is the main advantage of this product over a credit or debit card. When you spend on a currency you’ve previously loaded onto the card, you avoid the 3% fee for currency conversion, which is charged by most debit and credit card providers. Travel cards are also dual card accounts. This means you get a backup to use in case something happens to the main card. Although these cards do not have your name printed on the front, you shouldn’t have any troubles using your card for point of sale payments and to withdraw from an ATM, especially if your travel card is a Visa or Mastercard.

Using prepaid travel cards

What to take on your next trip to the UK?Think about how you're going to use your card. If you'll be making a large number of cash withdrawals, you may want to go for a card such as the NAB Traveller Card, which doesn't charge international ATM fees when withdrawing a supported currency.If you plan to reload your card often, think about a card with a low reload fee such as the Qantas Cash Card, which also has one of the lowest ATM withdrawal fees at £1.25 GBP compared to the £2 charged on most other cards. This card also has a low fee for withdrawing euros, which Ireland uses – €1.50 per withdrawal. If you're planning on stopping at any other destinations on your way, try to find a travel money card that supports those currencies too, as this will ultimately make it more useful. Also bear in mind that the Velocity Global Wallet and Qantas Cash Card allow you to earn Velocity Points and Qantas Points respectively, so this may factor into your comparison.

What not to take?Most of the cards above have similar withdrawal fees when withdrawing Pound Sterling, but if you plan to travel to Ireland, you may wish to stay away from the ANZ Travel Card and Commonwealth Bank Travel Money Card, as these have higher fees of €2.20 per withdrawal compared to the average of €1.50-€2 per withdrawal. Also, if you plan on reloading your card often and in smaller amounts, you may wish to stay away from the Cash Passport Mastercard and Suncorp Cash Passport. These come with a hefty reload fee of 1.1% or $15, whichever is greater. This isn't a high fee if you load more than $1500 onto your card, but if you load amounts of say $500 onto your card each time, you'll effectively be paying a reload fee of 3%.

Using debit cards

Unlike a credit card, which is basically a loan, a debit card is attached to your bank account. Most debit cards have a similar fee structure to credit cards for international purchases, but it’s more expensive to withdraw cash on credit.

Like credit cards, debit cards are also subject to annual fees and other surcharges added by shops. Even though most businesses in the UK will readily accept any Visa or Mastercard debit card, using a travel-friendly debit account will go a long way towards saving on fees. The only travel-friendly debit account in the market is the Citibank Plus Transaction Account. With this account, you won't pay foreign transaction fees, currency conversion fees, ATM withdrawal fees or transfer fees when moving money to any overseas account. However, you may have to pay ATM owner fees depending on which ATM you use.

If you're a Westpac Group cardholder and you use your card at a Barclays Bank ATM, you won't have to pay the $5 withdrawal fee, but you'll still have to pay the currency conversion fee. You can read more about the Westpac International ATM Alliance here.

Using credit cards

A credit card allows you to purchase goods and services on credit in basically any currency without having to preload funds onto your card. Most credit cards charge a conversion fee of 3% when you transact in a foreign currency. Features of credit cards include interest-free days on purchases and expensive charges for withdrawing cash, and some credit cards offer complimentary travel insurance and airport lounge access. Read on to find out which Australian credit card will serve you best when travelling to the UK.

Credit card acceptance in the UK

The UK does not have credit card acceptance issues. Major credit card brands like Visa, Mastercard, American Express and Diners Club are readily accepted in the region. If you have an American Express and Diners Club credit card, you may have issues using your cards at small businesses — just like in Australia. Take a backup Visa or Mastercard if you’re using AMEX or Diners as your main card.

Below are some of the credit cards fees to take into consideration:

ATM withdrawal fees. The 28 Degrees Mastercard does not charge for international ATM withdrawals. Note that all credit cards may be subject to local ATM fees charged by the ATM operators.

Cash advance fees. In addition to ATM withdrawal fees, you may also be charged a cash advance fee.

In some cases, you can avoid cash advance fees by having your card preloaded with your own funds. By preloading the card with your own money, know that you aren't generally covered by the fraud protection standard with Australian credit cards. You can find a list of the providers that will and won’t waive fees when you preload your own money onto your card in the FAQ section of this page.

This was Will’s everyday bank card and he took it across as a backup card

Accepted in most locations but there is a pretty solid fee

Were there any places where your cards weren’t accepted?

Will found that there were a few places where the Cash Passport travel card was not accepted. Will said that in this instance he would use his backup ANZ card or he would go for a short walk to the next ATM or merchant. He didn’t have to look far to find a place where his Cash Passport would work.

How much cash would you take on a three-week holiday?

Will says he was a little shocked at how expensive things were in the UK, which he puts down to the exchange rate between the Australian dollar and the Pound Sterling. Will budgeted for AUD$150 per day for a total of AUD$3,000 over three weeks in the UK (including accommodation). Will says that he could have spent double this amount very easily.

What money tips do you have to anyone travelling to this country?

Pay attention to how much you are paying for food and alcohol. Will says eating out and drinking in London and other parts of the UK is extremely expensive. He gives this advice for keeping costs low: “Hunt out good pub meal bargains and shop at Tesco and Sainsbury's for your other meals. Try to avoid drinking coffee out.”

Will also recommends AirBnB, especially if you’re travelling as a group. Hostel dorm beds were upward of £35 a night.

A guide to deciphering Pound Sterling banknotes

The Pound Sterling is the United Kingdom's official currency. A pound is subdivided into 100 pence. The pound is the fourth most traded currency in the foreign exchange market and the third most held reserve currency in global reserves. The Pound Sterling comes in denominations of £5, £10, £20 and £50 banknotes. The banknotes are issued by the Bank of England, which has been doing this for over 300 years.

Banknote

Features

£5

The current £5 banknote features Elizabeth Fry, who made her name fighting for improved living conditions for women in European jails.Issued on 21 May 2002.

£10

The £10 banknote features Charles Darwin, the Victorian naturalist who developed the theory of evolution, on the back.Also pictured in the second lowest denomination are an illustration of Darwin’s own magnifying lens, and the flora and fauna that he may have encountered on his travels.Issued on 7 November 2000.

£20

The current £20 banknote drew some commentary since it features the Scottish economist, Adam Smith. The note has an illustration of ‘The division of labour in pin manufacturing’.Previous issues of Bank of England £20 notes were known to have suffered from a higher incidence of counterfeiting than any other denominations.Issued on 13 March 2007.

£50

The new-style £50 banknote entered circulation on 2 November 2011.The note features two Britons on the back – Matthew Boulton and James Watt with steam engine and Boulton’s Soho factory.

Find cash and ATMs in the UK

Make sure you’re covered by insurance on your trip to the UK

Luckily for Australians, the UK has a Reciprocal Health Care Agreement with Australia, which means that you can get health care through its public system. However, travel insurance protects travellers against more than just health-related issues. Travel insurance provides cover for:

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4 Responses

skyeMay 22, 2016

I am going to London in June, I live in the U.S. If I purchase a prepaid travel card for example with 1000 pounds on it, would I also have to pay conversion fees or other fees or will the amount I have on the card be what I have and that’s it?

As an Australian financial comparison service, we usually only provide information regarding Australian travel products.

Usually with a prepaid card, you need to load the card with your local currency and then transfer it to the supported currency that you need to use on your holiday. Once the funds are converted to the local currency, e.g. GBP, then you shouldn’t be charged currency conversion fees when spending. Prepaid cards can usually be topped up as you need to, though you may be charged a fee when you reload the card with funds depending on the card you have.

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